Legislation 2/13/2023

By Jeffrey Bellant

Independent dealers in Washington state are lobbying against a bill that would force used car dealers to provide an express warranty on vehicles with up to 125,000 miles.

The Washington State Independent Automobile Dealers Association is leading the fight to kill this legislation.

“It’s not really going to help at all,” said Rick Olson, WSIADA director of operations.

The bill originated after a customer bought a $13,000 car last year and brought it back a short time later because it reportedly needed $3,000 in repairs, Olson said.

The dealer pointed to the as-is buyer’s guide and implied warranty waiver, saying he did not have to do the repair.

The consumer went to an investigative reporter who contacted the dealer, resulting in the dealer buying the car back, Olson said.

But the reporter went forward with a story and questioned why a lemon law didn’t apply to used cars. He went to the state attorney general on the issue, Olson said.

Washington Attorney General Bob Ferguson partnered with a state representative to introduce HB 1184, the Used Motor Vehicles Express Warranties Act. It would require a warranty on used vehicles based on a sliding scale depending on the mileage at the time of purchase.

For example, a car sold with less than 40,000 miles would have a warranty of 90 days or 3,750 miles. From 40,000 to 79,999 miles, the warranty would drop to 60 days or 2,500 miles. Then cars with 80,000 to 124,999 miles would be covered for 30 days or 1,250 miles.

Vehicles with 125,000 miles or more would be exempt from the warranty.

The bill was introduced on Jan. 12. Olson said the bill moved into House Consumer Protection and Business committee earlier this year.

“On Jan. 18, we attended a hearing and had three members from our board of directors – who are car dealers – testify about aspects of the (issue) that lawmakers hadn’t thought about,” Olson said.

For example, the bill would allow a dealer three chances to fix a vehicle or they have to buy the vehicle back and pay 15 cents per-miledriven back to the customer, Olson said.

Association members testifying had several questions about how the proposed law would work in practice. How would a dealer do license fee returns?

How would they return the state business and operation tax?

How would a return affect a customer’s credit score since the credit already takes a hit when they buy it?

“There were a whole bunch of things the committee members didn’t know would attach to this bill,” Olson said.

The bill was amended a couple of times.

Another issue that came up involved the requirement for repairs that only franchise dealers can do, which will end up taking a lot of time.

The biggest misconception over this issue is consumers who think lemon laws apply to used car purchases.

“That happens all the time,” Olson said.

Forcing these warranties on consumers is just going to affect affordability.

The concerns and objections did have an impact, Olson said.

WSIADA had strong support at the original hearing on the bill.

“We had our board president, vice president, treasurer along with (representatives from) two auctions who spoke remotely and someone from the Washington Retail Association who testified against the bill,” Olson said.

Other people who gave input on the bill include 30 against and five for, he said.

“Just based on that, they knew the bill wasn’t going to move out of the House,” Olson said.

“As far as we know, the House side of the legislation is dead. It’s not going to leave the committee.”

However, Ferguson was able to find a sponsor for the bill on the Senate side, Olson said.

“That one’s going to be Senate Bill 5610 and it’s the same (language),” Olson said.

“This bill would just push consumers to buy from other consumers instead of dealers. It also will raise legal issues.”

What happens to the Used Car Buyer’s guide is another question the legislation doesn’t answer.

At press time, Olson said WSIADA’s lobbyist expected there would be a hearing later this month.